Investing in IndiaP2P and unlocking capital for 80M women entrepreneurs
IndiaP2P's tech platform ensures the country’s highest-quality borrowers get access to faster, cheaper capital.
June 23, 2023
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IndiaP2P is building a technology platform that disintermediates the capital value chain and enables faster, cheaper capital for women borrowers who are recognised as the highest quality borrowers in the country. Simultaneously, it provides opportunities for retail investors to invest directly in this asset class.
This proprietary technology stack enables superior risk management through data-driven underwriting, its portfolio diversification engine and rule-based matching of lenders with borrowers. Moreover, IndiaP2P has been able to deliver significantly higher returns to investors through disintermediation and technology-driven efficiencies in sourcing, operations and collections.
Live for about 12 months now, IndiaP2P has delivered >16% p.a. returns for retail investors and provided access to credit to 6000+ women entrepreneurs across India at near zero NPAs consistently since inception.
Recent regulatory changes, especially the launch of the NBFC-P2P licensing framework and the elimination of tax arbitrage on MLD (Market Linked Debentures) opens up new avenues for unlocking capital supply to this segment using technology and IndiaP2P is well placed to capitalize on this.
Here's a glimpse of the IndiaP2P story as told by Neha:
Unlocking capital supply for 80 million women-owned businesses, a generational business opportunity
Historically, India has been a credit-starved country. Almost all segments of retail and institutional credit in India have a demand-supply mismatch. But the mismatch is stark in certain borrower segments like women entrepreneurs where the demand is 2.5x of supply despite the borrower’s willingness to pay upwards of 25% p.a. interest rates. In FY24 alone, against a capital demand of USD 145 billion, this segment was able to attract a supply of only USD 58 billion, resulting in a mismatch of > USD 80 billion. Less than 5% of the total available capital supply of USD 1000 billion from retail and institutional investors flows into this segment.
This lack of capital supply is mainly driven by leakage of the yield (7-12%) to end investors through the intermediaries in the value chain (Banks and Wholesale NBFCs) and operational inefficiencies in sourcing, underwriting and collections.
The success of microfinance institutions, with over 9 of them becoming banks in the last decade alone, has proven the depth of the market and the existence of large profit pools. We believe IndiaP2P can further disrupt this segment and supplemented by founders’ relevant backgrounds, is the new way to build a large financial institution for new India.
IndiaP2P unlocks capital using a proprietary technology platform that disintermediates and derisks
IndiaP2P identified this opportunity early on and has approached solving the problem using technology. At the core of IndiaP2P is a proprietary technology platform that facilitates an easier flow of capital from end investors to the women borrowers, by disintermediating the Banks and wholesale NBFCs from the process and also removing the existing inefficiencies in sourcing, collections and operations. This unlocks a 7-12% additional yield for both retail and institutional investors, kicking off the flywheel of more investments flowing to this hugely underserved segment.
On the demand side, IndiaP2P has built an integrated platform that supports the origination, underwriting and servicing of loans to high-quality borrowers. The beauty of the IndiaP2P model is that it is a purely tech-driven business with a simple yet superior technology that enables existing channel partners on the ground to take care of operations.
Prior to IndiaP2P, investors in debt earned typically low returns, often, not even beating inflation. Enabling investors to earn higher returns on debt while investing in historically low-risk and purposeful borrower segments unlocks fresh supply in a sustainable manner. With the easy discovery and access to credible borrowers, investors can invest easily while borrowers gain from faster and more flexible credit.
The IndiaP2P advantage - impact powered by technology and deep domain expertise
Retail investors on the IndiaP2P platform have enjoyed annual returns of over 16% p.a. Moreover, IndiaP2P has facilitated access to credit for more than 6000+ women entrepreneurs across India, while maintaining an exceptional track record with near-zero non-performing assets (NPAs) since its inception.
Building such a deeply differentiated business in a heavily regulated domain needs a founding team that can seamlessly straddle across technology, finance and regulations. In Neha, Ravinder and Mohit, we have the perfect foil. Neha Juneja (CEO), previously co-founded and scaled Greenway, India’s largest clean cooking enterprise (USD 50+ million revenues), where she developed multiple credit partnerships catering to women borrowers across rural India and sub-Saharan Africa. This work, along with her experiences in finance and engineering over the previous 12 years, inspired her to found IndiaP2P. Ravinder Voomidisingh (COO) brings 15+ years of lending experience, having underwritten > USD 7 billion worth of loans including ones catering to microfinance borrowers. Mohit Gupta (CPO) is a Fintech specialist who has built large-scale financial systems that have facilitated close to USD 30 billion in transactions. The founding team is well poised to capture the multi-billion dollar opportunity through their deep domain and technology expertise.
IndiaP2P is racing ahead to realise its potential to become one of the generational financial institutions in India in the coming decade, delivering unparalleled impact both to Indian investors and Indian women entrepreneurs alike.
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